The popular mortgage-interest tax deduction could be eliminated by a bipartisan commission charged with finding ways to chop the deficit, The Wall Street Journal reported.
The Journal also reported that child tax credits and payment for health insurance with pretax dollars all could be cut by the deficit panel, which will issue recommendations on balancing the budget by 2015.
The report hinted that these tax breaks could be preserved at a lower level.
The Journal reported that the panel is expected to steer clear Medicare, Medicaid, Social Security and a broad rewrite of the tax code in its short-term recommendations. The panel could still make long-term recommendations to change these issues, but they would be less concrete, the Journal reported.
The Obama administration said earlier this month the federal deficit hit a near-record $1.3 trillion for the just-completed budget year, the Associated Press reported. That means the government had to borrow 37 cents out of every dollar it spent as tax revenues continued to lag while spending on food stamps and unemployment benefits went up as joblessness neared double-digit levels in a struggling economy.
While expected, the eye-popping deficit numbers provide Republican critics of President Barack Obama's fiscal stewardship with fresh ammunition less than three weeks ahead of the midterm congressional elections. The deficit was $122 billion less than last year, a modest improvement.
Voter anger over deficits and spending are a big problem for Democrats this election year. Republicans are slamming Democrats — who face big losses in November — for votes on Obama's $814 billion economic stimulus last year and on former President George W. Bush's $700 billion bailout of Wall Street.
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